Utah Admin. Code R590-68-18 - Exemption of Long-Term Profits Incident to Sales Within Six Months of the Exercise of an Option

(1) To the extent specified in Subsection (2), a transaction involving the purchase and sale, or sale and purchase, of an equity security, where the purchase is pursuant to the exercise of an option or similar right, is exempt if:

(a) acquired more than six months before its exercise; or

(b) acquired pursuant to the terms of an employment contract entered into more than six months before its exercise.

(2)

(a) The profits inuring to the insurer may not exceed the difference between the proceeds of the sale and the lowest market price of a security of the same class within six months before or after the date of sale.

(b) This Section R590-68-18 does not enlarge the amount of profit that inures to the insurer in the absence of this section.

(3) The disposition of a security purchased in a transaction under Subsection (1) is exempt from Section 31A-3-505, pursuant to a plan or agreement for merger or consolidation, or reclassification of the insurer's securities, or for the exchange of its securities for the securities of another person that acquired its assets, or which is in control, as defined in Subsection 368(c) of the Internal Revenue Code, of a person who acquired its assets, where the terms of the plan or agreement are binding upon stockholders of the insurer except to the extent that dissenting stockholders are entitled, under statutory provisions or provisions contained in the certificate of incorporation, to receive the appraised or fair value of their holdings.

(4) The exemptions under this section do not apply to a transaction prohibited by Subsection 31A-5-303(3) or this rule.

(5) The burden of establishing market price of a security under this section is on the person claiming the exemption.

Notes

Utah Admin. Code R590-68-18

Adopted by Utah State Bulletin Number 2023-12, effective 6/9/2023